Property tax. Why you pay more than your neighbor

In her apartment perched at the top of the slopes of the Croix-Rousse, Julie (name changed) can embrace the charms of the city at a glance. From the imposing basilica of Fourvière which watches over the city to the hectic district of La Part-Dieu, passing by the Confluence which stretches out in the distance. A postcard setting that the thirty-year-old engineer offered herself in 2020 with years of savings… and decades of personal debt.

The joys of ownership were accompanied by the arrival of a new tax: the property tax. “I admit that his method of calculation is a bit abstruse, Julie smiles. For me, it was 454 euros in 2021. I remember that I am rather lucky in the 1er district and that I would pay dearly if my apartment of 57 m2 was a hundred meters further on, side 4e arrondissement. »

Read also on Tribune de Lyon: Increase in property tax in Lyon: who will pay?

Different from the housing tax (totally abolished in 2023 on main residences), the property tax paid to local authorities is based on three main pillars: the cadastral rental value of the property; the revaluation coefficient (voted in the finance law each year to take into account the increase in rents); and the tax rate for local authorities, the very one that the City of Lyon has chosen to increase from 29.26% to 31.89% (+9%).

Criteria dating from the 1970s

So much for the main lines. Now let’s dive into the detail of the calculation. To establish your tax, the tax authorities use what is called “cadastral income”.. This corresponds to the annual rental value (calculated according to several criteria, some of which date back to the 1970s!), reduced by a reduction of 50%. The figure obtained represents the basis on which is then applied the rate of the communities (city, intermunicipality, etc.) which will ultimately give your property tax.

In 2021, Julie’s base amounted to 1,259 euros for her Croix-Rousse apartment. The rate of the municipality at the time (29.26%) raised the share of the contribution dedicated to the City to 368 euros, to which are added other local taxes (union of municipalities, household waste, etc.) and management fees to arrive at a total of 454 euros. In 2023, with the increase in the base and that of the rate decided by the City of Lyon, Julie can expect a high property tax of 515 euros.

7.1%. It is the percentage increase in cadastral rental values ​​in 2023 (compared to 3.4% in 2022), which serves as the basis for calculating the property tax. This increase is different from that decided by the City of Lyon, but will also inflate the bill for owners. Note that rental values ​​are revalued each year.

In numbers

In 2021, in France, 32 million natural persons owners, or 57.7%, were subject to property tax on buildings, amounting to 27.3 billion euros. In 2021, an owner was taxed on average up to 849 euros in property tax on all of his properties.

In France, nearly six out of ten owners own only one property for an average amount of property tax of 525 euros and two out of ten owners own two, for an average amount across all properties of 807 euros in tax. land. The remaining owners, about two out of ten, with at least three properties, are taxed at 1,642 euros and represent almost half of the total amount of property tax on buildings due by natural persons.

Made with Flourish

The average national municipal rate for 2022 is 35.75%, i.e. almost the highest rate practiced in metropolitan France in Grigny (38.99%), Vaulx-en-Velin (37.49%) and Caluire-et-Cuire (35.83%). 56 of the 59 municipalities practice a lower rate, the prize going to Quincieux (19%).

In Lyon, households owning five or more dwellings own 57% of rental apartments, and up to 66% around Place Bellecour and the Hôtel-Dieu.

Read also on Tribune de Lyon: Property tax. An average increase of five euros per month… really?

  • Average amount of property tax on properties built in the Rhône in 2021: 797 euros.
  • Average amount of property tax on properties built in France in 2021: 694 euros.
  • Intermunicipal share of the property tax: 0.55% (i.e. 14 million euros in revenue for the metropolis of Lyon in 2021).
  • Average national municipal rate 2022: 35.75%.
  • Average municipal rate Rhône 2022: 31.52%.
  • Metropolitan municipal average rate 2022: 30.07%.

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Property tax. Why you pay more than your neighbor